1. Distributional tensions in the South of Italy: empirical evidence and policy implications
Vito Peragine| Università di Bari
SAPIENZA UNIVERSITÀ DI ROMA
25-26 NOVEMBRE 2016
CONVEGNO SCIENTIFICO
LA SOCIETÀ ITALIANA E LE GRANDI CRISI ECONOMICHE

2. Outline Inequality and distribution: why do we care about?
A tour d'horizon of the evolution of inequality: in Europe, in OECD countries, at the Global level
Inequality and distributional change in the South of Italy

3. Inequality: why do people care about?
Fast increase in inequality or lasting high inequality in key countries (e.g. US)
Increasing media attention to top incomes.
Inequality and recession:
Inequality has been often presented as “the price to pay” for sustained economic growth. When growth is low, and recession is prolonged, inequality is not tolerated anymore.
"The social elevator does not work anymore“
The perspective of upward mobility, for themselves or for theirs children, may lead individuals to accept a high level of inequality in current incomes. When, for the downturn of economies, such perspective is unsecure, and, on the other hand, the welfare of the next generation appears worse than the welfare of the past generation, the current level of inequality becomes largely unacceptable.

4. Inequality: why do we (economists) care about?
Intrinsic and instrumental reasons:
Inequality and distributive justice
Inequality and growth: direct and indirect effects
Inequality, perceptions, political preferences and attitudes to redistribution
Non economic consequences of economic inequality

5. Inequality: why do we (economists) care about?
Inequality and Distributional tensions
Social cohesion or social contract
Economic performance
Crisis of existing social contracts in Europe and US?
Is the perception that 'inequality is rising everywhere ' correct?
Differences across countries, periods and inequality measures

6. The cost of 'excessive' inequality
Economic costs
Depressive effect through the demand side
One of the causes of the Great Recession ?
Inefficiency of the inequality of opportunity
Unexploited economic potential
Endogenous distortive redistribution
Taxation , violence (?)
Non-economic costs
'Populism' (but, is it inequality or other types of exclusion?)
Self-reinforcing rise in inequality through intergenerational transmission
How much is too much inequality?

7. Other inequality concepts and distributional tensions
Polarization and the decline of the middle class
There are several signals of crisis of the middle class. Frustration, perceptions of falling standards of living, related to the shortage of good jobs, dissatisfaction with the quality of public services.
The intergenerational divide
Some evidence suggests that young generations are experiencing an economic situation that is worse than that experienced by the older generations, both in terms of average living standard and in term of risk. Vulnerability, poverty and unemployment tend to be higher for young individuals.
Social mobility and inequality of opportunity

8. Outline Inequality and distribution: why do we care about?
A tour d'horizon of the evolution of inequality: in Europe, in OECD countries, at the Global level
Inequality and distributional change in the South of Italy

12. How unequal the world is?
A lot, it has a Gini of 70
In PPP terms, the top 5 percent of world population controls one-third of world income. They make in 2 days what the poorest 5 percent make in a year (B. Milanovic)
From survey data that do not include the really rich people!
Source: Branko Milanovic
Global inequality in a more educated world

13. Global Inequality evolution: 1950-2012
.75
China moves in
Concept 3
Concept 2
.65
Gini coefficient
.55
Concept 1
By the way, if the world were a country it would be the most unequal…
Divergence begins
Divergence ends
.45
1950
1960
1970
1980
1990
2000
2010
year
Source: Branko Milanovic
Global inequality in a more educated world

14. Global inequality in a more educated world
Global Inequality Evolution since the fall of the Berlin Wall
Real income growth at various percentiles of global income distribution, (in 2005 PPPs)
X “China’s middle class”
X“US lower middle class”
Global inequality in a more educated world

15. Outline Inequality and distribution: why do we care about?
A tour d'horizon of the evolution of inequality: in Europe, in OECD countries, at the Global level
Inequality and distributional change in the South of Italy

16. Notes: Household equivalized disposable income at constant prices of 2005.
SHIW Historical Database ( ), Bank of Italy.

17. Notes: Household equivalized disposable income at constant prices of 2005.
SHIW Historical Database ( ), Bank of Italy.

18. Notes: Household equivalized disposable income at constant prices of 2005.
SHIW Historiacl Database ( ), Bank of Italy.

19. Notes: Household equivalized disposable income at constant prices of 2005.
SHIW Historical Database ( ), Bank of Italy.

20. Notes: Household equivalized disposable income at constant prices of 2005.
SHIW Historical Database ( ), Bank of Italy.

21. Notes: Household equivalized disposable income at constant prices of 2005.
SHIW Historical Database ( ), Bank of Italy.

23. Grazie per l’attenzione.
25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA
TITOLO INTERVENTO SOTTOTITOLO
Grazie per l’attenzione.